PRASANNA KUMAR MOOKERJEE Vs. BURN AND COLD

JUDGEMENT

(1.) The litigation, which has resulted in this appeal, was commenced by the respondent company against the defendant-appellant for accounts. The trial of the suit extended over many days in the original Court, and the present appeal, which has been preferred against the preliminary decree, has been elaborately argued on both sides. The real merits of the case are, however, comprised in a very narrow compass, and the precise rights and liabilities of the contesting parties are, by no means, difficult to determine. The fact that the contest has been so keen and prolonged, is due to the circumstance that the plaint was not very artistically framed, and questions have been argued both here and in the Court below, which do not properly arise for consideration at the preliminary stage. Before we deal, however, with the argument addressed to us in respect of the subject-matter of the controversy, it is desirable to give an outline of the facts and events which, in our opinion, are established beyond the possibility of doubt upon the evidence.

(2.) The plaintiffs are a joint stock company incorporated under the Indian Companys Act of 1882, and carry on business as contractors, manufacturers and merchants, at amongst other places, Howrah and Calcutta. From about 1870, the defendant has been in the service of the company, and has occupied positions of trust and responsibility; latterly he has been their Head Shipping Clerk. In this capacity he used to receive all goods which came to Calcutta and Howrah in ships for the plaintiff company, to land them at their premises and to pay all shipping charges, as also freight, duty and other incidental charges in respect of the goods. In the service of the company there were two Sircars, by name Narain Chandra Dey and Provash Chandra Banerji, who were employed to clear goods from the jetty and the docks, to take delivery orders in respect of bills of lading from steamer agents, to pay the freights at the offices of the latter and to pay the customs duties. When a particular consignment had to be cleared, one Hurry Charan Banerjee used to prepare what is called the challan from the invoice, and, it appears from the evidence, he used to fill up the columns in which the amount of duty leviable had to be entered. Hurry Charan then made over the challan to one or other of the Sircars, who usually made it over to one of the superior members of the staff, Mr. Dunn, for signature. In the absence of Mr. Dunn, the challan was signed by the defendant. The Sircar then received the money from either the defendant or from Mr. Dunn to enable him to make the necessary payments on account of customs-duty. It is abundantly clear that according to the usage which prevailed in the establishment, a larger sum was put into the hands of the Sircars than what had been calculated as the probable amount leviable on account of customs- duty. This circumstance is sought to be explained on the ground that, in the event of alarger demand made by the customs authorities, there might be delay in the delivery of the goods if the Sircars had not funds at their disposal to meet excess demands. It appears to have been taken for granted that, as the goods imported were of various classes and subject to different rates of customs-duty, the estimate, made in advance of the amount of duty payable might prove incorrect, and there might not inconceivably be a demand for a larger sum by the customs authorities. The Sircars, thus trusted with the money, were supposed to make the necessary payments, bring back to the defendant receipts for the sums actually disbursed, and refund to him the balance of the money in their hands. The defendant kept his accounts of these transactions in books, two of which have been put in, and marked as Exhibits (Exs. 14 and 15). These books are described on the face of them as the account books of the defendant, and they contain numerous entries, generally from day to day, of sums drawn by the defendant from the plaintiff company and disbursed by him in the payment of customs duties leviable in respect of imported goods. The entries in these books were not, so far as we can judge, from the evidence on the record, made from day to day, but they were substantially contemporaneous with the transactions; and generally at the end of every month the defendant submitted his account book to one of the superior European Assistants of the firm, who compared the entries with the receipts and thus checked their accuracy. It is doubtful to what extent this scrutiny of the monthly accounts extended, and it is fairly clear that some, at any rate, of the officers, who checked the entries, regarded the work as a mere matter of form. The business appears to have been conducted in this manner for many years, till, in fact, the end of the year 1905, when a discovery was made, precisely upon what information or by what method is not clear, and facts were brought to light, which led to the institution of criminal proceedings by the company against the defendant; these were speedily abandoned and were followed by the present suit. The fact, which was brought to light on the occasion, was of the simplest character, namely, that the receipts granted by the customs authorities for payment made to them on account of duty, had been fraudulently altered so as to make a difference of Rs. 300 in every case. The matter is best illustrated by a concrete example. For instance, if we take a customs receipt, dated the 5 August, 1905, as it stands at present in its altered condition, it runs as follows: Received from Burn & Co., the sum of Rupees four hundred twenty-nine and annas two only (Rs. 429-2-0).

(3.) This is signed by the Customs House Officer to whom the payment was made. The receipt bears on it a pencil endorsement to the following effect. S.S. Bavaria Rs. 429-2-0